Best Method to Root

I'm currently running the stock 2.1 OS on my Motorola Droid and I figured I would just wait it out for the 2.2 OTA but since that is up in the air I figured I'd go ahead and try to root the phone, especially after seeing the EasyRoot app which has since been pulled from the Market.

Before I begin I have a few questions which I tried to find the answers for but still aren't entirely clear on:

1. I know that it's a good idea to back up the phone prior to doing anything. What is the best method to back up the device to ensure that I don't lose my apps (paid and nonpaid) and my contacts information?

2. What would be the best process to go from the stock 2.1 OS to the rooted version of 2.2 with the WiFi tethering enabled?

3. Can I return my phone to stock if the need arises in the future and if so how?

4. Does the rooted version of 2.2 have the same battery life issues that the OTA update had?

You can easily go back to stock by downloading a stock rom image from Tom manager or from a website. The easiest way to root would be to use one of the new one touch methods. You backup your device via a custom recovery that you install while rooting.